AUDUBON, Pa., July 26, 2016 (GLOBE NEWSWIRE) -- Globus Medical, Inc. (NYSE:GMED), a leading musculoskeletal implant
manufacturer, today announced that it has entered into an agreement to acquire the international operations and distribution
channels of Alphatec Holdings, Inc., a publicly traded medical devices company (Nasdaq:ATEC) for $80.0 million in cash, subject to
certain closing adjustments. Globus Medical also agreed to extend a 5-year senior secured credit facility of up to $30.0 million to
Alphatec to support their working capital needs. The parties expect the closing of the acquisition to occur by October 2016
following satisfaction of the applicable closing conditions.
As a result of the acquisition, Globus Medical will assume Alphatec’s existing international direct and
distributor sales channels, which generated sales of approximately $71 million in 2015 and $15.6 million in the first quarter of
2016. Globus Medical intends to offer its own products through these sales channels, but during the transition, Globus
Medical will continue to sell Alphatec products. The timing of the transition in each country will depend upon regulatory
requirements and contractual or tender commitments. The transaction includes a supply agreement through which Alphatec will supply
its products to Globus Medical for up to five years.
David Paul, Chairman and CEO said, “Strategically, this acquisition gives us immediate access to Japan and
increased presence and penetration in other key geographies, and significant scale, roughly doubling our international sales.
In addition, we will be acquiring a talent pool of international sales professionals as well as an extensive network of
international distributors. We expect the impact to be marginally accretive in 2017 as we work through our transition and
integration plans and to provide up to 8 cents per share in incremental non-GAAP diluted earnings per share (EPS) in 2018 and
beyond.”
For the fourth quarter of 2016, Globus Medical expects this acquisition to add roughly $10 million of additional
sales and to be earnings neutral, excluding acquisition related costs, adjusted for tax, which are expected to be roughly $0.02 per
share. Globus Medical anticipates incurring significant expenses associated with integrating and optimizing this business in
2017. For 2017, Globus Medical expects the acquisition to add roughly $40 million of sales and contribute non-GAAP EPS of
approximately $0.03-$0.05.
Globus Medical will discuss this transaction during its previously announced quarterly earnings conference call
scheduled to be held today at 5:30 p.m. ET.
About Globus Medical, Inc.
Globus Medical, Inc. is a leading musculoskeletal implant company based in Audubon, PA. The company was founded in 2003 by an
experienced team of professionals with a shared vision to create products that enable surgeons to promote healing in patients with
musculoskeletal disorders.
Non-GAAP Financial Measures
To supplement our financial statements prepared in accordance with U.S. generally accepted accounting principles
(“U.S. GAAP”), management uses certain non-GAAP financial measures. For example, non-GAAP Diluted Earnings Per Share represents
diluted earnings per share excluding the provision for litigation, acquisition related items, and adjusted for the tax effects of
such adjustments. We believe this non-GAAP measure is a useful indicator of our operating performance, and particularly as an
additional measure of comparative operating performance from period to period as it removes the effects of litigation and
acquisition related items, which we believe are not reflective of underlying business trends.
Non-GAAP Diluted Earnings Per Share is not calculated in conformity with U.S. GAAP. Non-GAAP financial
measures have limitations as analytical tools and should not be considered in isolation or as a substitute for financial measures
prepared in accordance with U.S. GAAP. These measures do not include certain expenses that may be necessary to evaluate our
liquidity or operating results. Our definition of non-GAAP Diluted Earnings Per Share may differ from that of other companies and
therefore may not be comparable.
Safe Harbor Statements
All statements included in this press release other than statements of historical fact are forward-looking statements
and may be identified by their use of words such as “believe,” “may,” “might,” “could,” “will,” “aim,” “estimate,” “continue,”
“anticipate,” “intend,” “expect,” “plan” and other similar terms. These forward-looking statements are based on our current
assumptions, expectations and estimates of future events and trends. Forward-looking statements are only predictions and are
subject to many risks, uncertainties and other factors that may affect our businesses and operations and could cause actual results
to differ materially from those predicted. These risks and uncertainties include, but are not limited to, factors affecting
our quarterly results, our ability to manage our growth, our ability to sustain our profitability, demand for our products, our
ability to compete successfully (including without limitation our ability to convince surgeons to use our products and our ability
to attract and retain sales and other personnel), our ability to rapidly develop and introduce new products, our ability to develop
and execute on successful business strategies, our ability to successfully integrate the international operations acquired from
Alphatec, both in general and on our anticipated timeline, our ability to transition Alphatec’s international customers to Globus
Medical products, our ability to realize the expected benefits to our results from the Alphatec acquisition, our ability to comply
with laws and regulations that are or may become applicable to our businesses, our ability to safeguard our intellectual property,
our success in defending legal proceedings brought against us, trends in the medical device industry, general economic conditions,
and other risks. For a discussion of these and other risks, uncertainties and other factors that could affect our results,
you should refer to the disclosure contained in our most recent annual report on Form 10-K filed with the Securities and Exchange
Commission, including the sections labeled “Risk Factors” and “Cautionary Note Concerning Forward-Looking Statements,” and in our
Forms 10-Q, Forms 8-K and other filings with the Securities and Exchange Commission. These documents are available at
www.sec.gov. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to
time and it is not possible for us to predict all risk factors and uncertainties, nor can we assess the impact of all factors on
our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those
contained in any forward-looking statements. Given these risks and uncertainties, readers are cautioned not to place undue
reliance on any forward-looking statements. Forward-looking statements contained in this press release speak only as of the
date of this press release. We undertake no obligation to update any forward-looking statements as a result of new
information, events or circumstances or other factors arising or coming to our attention after the date hereof.
Contact: Daniel Scavilla Senior Vice President, Chief Financial Officer Phone: (610) 930-1800 Email: investors@globusmedical.com www.globusmedical.com
